Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver — licensed Financial Advice Provider (FSP712931) · Last updated 2026-10-20

Life insurance premium payment options in NZ

New Zealand life insurers let you pay premiums fortnightly, monthly or yearly, and some offer weekly, quarterly or half-yearly. Payment is usually by direct debit or card. Whether yearly is cheaper depends on the insurer. The wordings and pages we read do not publish a percentage for paying more often, so work it out from the quote: add up a year of instalments and compare it with the yearly price.

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Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

In short

Frequencies we found: Momentum Quick Life and Funeral Insurance fortnightly, monthly or annually; Fidelity fortnightly, monthly, quarterly, half-yearly or yearly; Chubb's Assurance Extra weekly to annually.
Card payments can carry a fee. Momentum's Funeral Insurance wording says "an additional processing fee will apply for card payments" and gives no percentage.
A missed payment does not cancel cover at once. AIA gives 30 days' grace; Momentum can cancel when premiums stay unpaid for over a month.
If you pay up front for a year and later cancel, check whether unused months are refunded. Insurers differ.

How can you pay life insurance premiums in New Zealand?

You choose a frequency and a method when you apply, and most insurers let you change later. What the documents say:

Insurer	Frequency	Method	Source
Momentum, Quick Life	Fortnightly, monthly or annually; you can ask to change this any time	Direct debit or credit card	Quick Life wording; Momentum
Momentum, Funeral Insurance	Fortnightly, monthly or annually	Card payments carry a processing fee	Funeral wording
Fidelity Life	Fortnightly, monthly, quarterly, half-yearly or yearly; not every option on every policy	Direct debit preferred; credit card and internet banking	Fidelity FAQ
Chubb Life, Assurance Extra	Weekly, fortnightly, monthly, half-yearly, annually	Direct debit or credit or debit card	Chubb brochure
AIA Living	Premiums are paid "on a regular basis as agreed with AIA"; the wording refers to paying less frequently than monthly	Direct debit, credit card or debit card	AIA umbrella wording

Chubb's brochure also lists a minimum premium of $20 a month including a policy fee, and AIA's wording says a policy fee will normally rise each year in line with the consumers price index. A fee of that kind sits outside the frequency question, but it is part of what you pay.

AIA adds one practical rule: a payment is not effective until it has been credited and cleared to AIA's bank account. If your bank takes two days, pay early.

Monthly, fortnightly or yearly: what costs less?

We looked for a published surcharge for paying more often and did not find one. The AIA wording, Fidelity's FAQ, Chubb's brochure and both Momentum wordings do not state a percentage for any frequency. You may see "4 to 8 percent" in articles. We have no source for it, and we do not use it.

That does not mean every option costs the same. It means the test has to come from your own quote. Ask for the premium at each frequency, then do this arithmetic:

Multiply the instalment by the number of payments in a year: 12 for monthly, 26 for fortnightly, 52 for weekly.
Compare that total with the yearly price.
The gap, divided by the yearly price, is what paying more often costs you.

Worked example (round numbers, not any insurer's price). Suppose paying yearly costs $600 for the year, and the same cover can instead be paid in 12 instalments of $52 or 26 instalments of $24. Monthly instalments: 12 x $52 = $624. Fortnightly instalments: 26 x $24 = $624. Each costs $24 more than paying yearly, which is 4 percent of $600. If the price and the gap did not change for ten years, that is $240. Real premiums often change. A stepped policy re-prices each year with age, so the gap would move with it. Your own quote is the only number that counts.

The benefit of paying more often is cash flow, not price. A monthly or fortnightly payment is easier to carry than a lump sum, and a payment you can sustain is worth more than a discount you cannot.

Which payment method suits you?

Direct debit is the usual default, and Fidelity lists it as preferred. It is hard to forget, but check that your account can cover the date.
Credit or debit card is accepted by AIA and Chubb. Momentum lists credit card for Quick Life, and its Funeral Insurance wording says a processing fee applies to card payments without saying how much. Ask Momentum before choosing a card. Do not rely on a figure from a forum.
Internet banking is listed by Fidelity as an option.

If your bank account or card changes, tell the insurer straight away. A failed collection is how most missed payments start.

What happens if you miss a life insurance payment?

The rules are in your policy. From the documents we read:

AIA: "You have 30 days' grace in respect of any premium due." AIA may cancel by written notice if a premium remains outstanding 31 days after the due date. Reinstatement is not automatic. If a non-health claim is paid while a premium is overdue, the overdue premium may be taken from the claim.
Momentum Quick Life: Momentum can cancel if premiums remain unpaid for over a month, after written notice to your last known contact details. Paying after cancellation "does not automatically reinstate" the policy, and reinstatement is subject to Momentum's approval and any conditions it sets.
Momentum Funeral Insurance: unpaid premiums over a month let Momentum cancel. Reinstatement is by application, outstanding premiums must be paid first, and the wording says it "is not guaranteed".

Reinstating cover is not the same as never having lost it. Quick Life excludes pre-existing conditions and suicide for the first 2 years, and the wording says that window restarts from the date a policy is reinstated. Funeral Insurance pays only for accidental death in its first 24 months. Do not let a payment fail without checking what the restart would mean. Our page on missed life insurance premiums goes deeper on grace periods.

What if you pay yearly and then cancel?

Paying a year ahead ties up money you cannot get back unless the policy says so. The documents differ:

AIA: if you pay less often than monthly, AIA refunds any part of a premium covering a period of more than one month past the date it receives your cancellation notice. Otherwise it does not have to refund premiums already paid.
Momentum Quick Life: after the 30-day free look, the wording says that if you cancel and later reapply, previously paid premiums will not be refunded.
Momentum Funeral Insurance: you can cancel on 30 days' notice, and the premiums paid are not refunded. There is a 30-day free look from the acceptance date with a full refund if there has been no claim.

So with Momentum, a yearly payment followed by an early cancellation can leave unused months unrefunded. With AIA it largely would not. Check the cancellation clause in any wording before paying a large instalment. The same logic applies to an old policy you may cancel or change.

Budgeting tips to keep cover sustainable

Know what happens to the premium. A stepped premium rises each year, a level premium is set for a period. Our stepped versus level guide explains the difference, and why life insurance premiums increase covers the rest. The FMA says most premiums rise each year with age or inflation, and policies that are cheaper at first can cost more long term (FMA: Insurance).
Pick the date your pay lands. A direct debit a day after payday is less likely to bounce.
Set the cover amount you can sustain. A smaller policy that you keep is better than a larger one you let lapse. The page on life insurance cost by cover amount helps size it.
Do not cancel and re-buy to save a little. A new policy is assessed on today's health, and some restart early-years limits.

For funeral cover, remember total premiums can exceed the benefit. Momentum's Funeral Insurance pays a fixed benefit of $3,000 to $30,000 towards costs, and premiums stop at the 89th birthday. See funeral insurance for how that works. Momentum Life's rating from A.M. Best is B (Fair); its financial strength page has detail. Quick Life is for ages 18 to 65, and see the Quick Life page for its limits.

QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see how we are paid. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).

Frequently asked questions

Is it cheaper to pay life insurance yearly?

It can be, but we found no published figure. Total a year of instalments from your quote and compare it with the yearly price.

Can I change how often I pay?

Momentum says you can ask to change frequency any time on Quick Life. Other insurers vary, so ask.

Is there a grace period for life insurance?

AIA's wording gives 30 days. Momentum can cancel after a month unpaid. Others differ, so read your own wording.

Do I get money back if I cancel?

Not necessarily. Read the cancellation clause before paying ahead.

References

Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 17 October 2026
Momentum Life: Funeral Insurance Policy Wording (17 August 2023), retrieved 17 October 2026
Momentum Life: Quick Life Insurance, retrieved 20 October 2026
Momentum Life: Financial strength, retrieved 20 October 2026
AIA New Zealand: AIA Living umbrella policy wording, version 8, effective 12 May 2026, retrieved 20 October 2026
Fidelity Life: Frequently asked questions, retrieved 20 October 2026
Chubb Life: Assurance Extra Life Cover and Life Income Cover brochure (April 2025), retrieved 20 October 2026
FMA: Insurance, retrieved 20 October 2026